The Federal Aviation Administration (FAA) finalized its long-awaited small unmanned aircraft systems (UAS) rules on Tuesday, making it much easier for businesses to use drones for new and innovative commercial purposes. These rules provide much-needed clarity for the emerging drone industry and put the U.S. ahead of most countries, though significant gaps in the regulatory framework remain.

Until now, the operation of drones for anything other than personal recreation had to be approved on a case-by-case basis by the FAA (known as a Section 333 exemption). But thanks to the new rules, starting in late August commercial operations will be allowed without a waiver, so long as the drone weighs less than 55 lbs and is flown under 400 feet, during daylight or twilight, and within visual line-of-sight. The Section 333 exemption process will remain in place for certain operations that are restricted under the rules.

The new rules also require pilots to take an online course or a test in order to operate drones (depending on their experience level), but the FAA threw out the more burdensome requirement that drone pilots have manned aircraft flying experience. Additionally, the rules permit the transportation of property for compensation or hire, so long as it is within a state (opening the door for potential delivery applications in the future).

Overall, the drone industry has lauded the rules as an important milestone in expanding opportunities for businesses to capitalize on the production efficiencies that drone technologies promise. However, the rules don’t allow for some of the most innovative drone operations, such as beyond-line-of-sight, at night, and over people (although operators may be able to get “waivers” from some of these limitations). The rules also do not provide any guidance around UAS traffic management (UTM), which NASA is currently working to develop. Addressing some of these outstanding issues, particularly around beyond-line-of-sight operations, could fuel a $1 billion domestic drone market by 2018.

Fortunately, since the FAA will no longer need to process as many case-by-case Section 333 exemptions, the agency will have more resources to put towards further developing the regulatory framework and closing some of the remaining gaps highlighted above. As we have argued before, these rules represent only a first step in an evolutionary process of addressing a rapidly growing industry. FAA Administrator Michael Huerta noted with the release of the rules that the agency is “already working on additional rules that will expand the range of operations.” We are glad to hear that and hope that going forward, there will continue to be constructive cooperation between the federal government and startups, organizations, and leading innovators in the UAS industry. America’s continued leadership in the global drone market depends on it.

Learn more about how policymakers can help drive innovation in the drone market by checking out our FutureTech: Drones publication here.

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